1. A. A person operating an agricultural operation that incurs additional commercial fertilizer costs due to conversion of nutrient use to meet the requirements of a phosphorus based nutrient management plan is eligible for a State income tax credit under this chapter, if:

   1. (1) A nutrient management plan meeting the requirements of COMAR 15.20.08 has been submitted to the Department;
   2. (2) The conversion of nutrient use is for the purpose of complying with the requirements set forth in COMAR 15.20.08 for the implementation of nutrient recommendations;
   3. (3) Those costs take into account management by the taxpayer of all acreage in their agricultural operation;
   4. (4) Those costs are related to the purchase of additional quantities of commercial fertilizer, specialized blends, or formulations, and not due solely to product price increases; and
   5. (5) The Department has approved a Certificate of Additional Fertilizer Expense for Income Tax Deduction, indicating the amount of credit that may be claimed.

2. B. The credit may be taken against the following types of taxes:

   1. (1) Personal income tax; or
   2. (2) Corporate income tax.

3. C. The credit may be claimed by the following types of agricultural operations:

   1. (1) Sole proprietorships;
   2. (2) Corporations; and
   3. (3) Pass-through entities, including partnerships, S-corporations, and limited liability companies on behalf of their partners, shareholders, and members, respectively.

Authority: Tax-General Article, §10-704.9, Annotated Code of Maryland

Effective date: September 2, 2002 (29:17 Md. R. 1382)